HANGZHOU: Luxury international automakers are increasingly turning to Alibaba's Tmall online marketplace to drive sales to China's digitally savvy consumers, according to a new report.
L2, a New York-based business intelligence firm that specialises in luxury consumer brands, reported that "global fashion brands have been slow to embrace Tmall, but luxury automakers have been less fearful as Chinese demand for online car sales takes off".
Out of 18 luxury marques examined in the L2 report, 10 have flagship virtual stores on Tmall while eight use the site to sell their vehicles directly to Chinese consumers.
Volvo, the Swedish marque owned by Chinese automaker Geely, emerged as the top auto brand on Tmall with five out of the top 10 best-selling models.
But Mercedes-Benz, Jaguar and Land Rover are also popular, although L2 noted that, with the exception of Italy's Maserati, foreign luxury automakers are currently using the site to sell lower priced, "accessible luxury" brands.
Mercedes-Benz, for example, only sells its Smart cars on the platform, while Maserati joined Tmall in order to reach customers in lower-tier Chinese cities where the brand is not available at local dealerships.
L2 went on to note that a recent survey by Capgemini Consulting found that more than three-quarters (77%) of Chinese consumers would be willing to buy a new car online – the highest proportion in the world.
"As auto brands weigh the pros and cons of setting up shop online in China, it will pay off to remain ahead of the curve digitally with consumer demand," the report said.
It added that the emphasis on using Tmall for accessible luxury extends beyond the auto sector. For example, some 73% of prestige beauty brands use Tmall virtual stores, although this drops to less than a third of luxury watch and jewellery brands and less than a quarter of luxury fashion brands.
Data sourced from L2; additional data by Warc staff